Treasuries sold off into the five-year auction, with 10-year yields hitting their highest since 2007 before stabilizing in New York and holding steady in Asia on Thursday, according to Commerzbank Research in a note.
White House National Economic Adviser Kevin Hassett said Federal Reserve officials not appointed by President Donald Trump are advocating a significant number of rate hikes, while restoring Fed independence is reportedly high on Chair Kevin Warsh's agenda, wrote Commerzbank in the note.
The United States is reportedly preparing a 90-day diesel export ban, according to Politico sources, though the White House denied the report and Energy Secretary Chris Wright said the measure is "not being discussed."
Brent oil prices are back above $102 a barrel, said the bank.
Treasury Secretary Scott Bessent said the China trade truce will be extended to Jan. 10, reportedly shorter than Beijing had expected. Bessent also described the US economy as "very strong," noting that higher energy prices have yet to feed through into core inflation. Separately, the US has invited Russian President Vladimir Putin to attend the G20 summit in Florida in December.
US equity futures are lower, while currencies are little changed, added Commerzbank.
European Central Bank Chief Economist Philip Lane said he sees little risk of a significant wage response to rising inflation, while Spain's Prime Minister Pedro Sanchez backed Pablo Hernandez de Cos as the next ECB president.
In Asia, Japan's manufacturing PMI fell to a six-month low of 54.1. Finance Minister Satsuki Katayama said Japan's currency intervention principles remain unchanged following the intervention.